German floods estimated to cost insurers at least €4bn

The German insurance association, GDV, believes that the recent severe flooding experienced in Germany may lead to €4-5bn ($4.7-5.9bn) of claims, whilst AON has put the potential cost of the floods at more than $10bn even though a large proportion of the damage is likely to be uninsured.

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This is a latest in a string of costly weather events for the continental European insurance industry. Only a small proportion of the losses are likely to fall on the Lloyd’s market, given only around 8% of property insurance income stems from non-UK European risks. Furthermore, reinsurance placements in continental European are dominated by large European reinsurers, who maintain a large market share through very competitive pricing. The ratings agency Fitch has said that the event may negatively impact the combined ratios of the German non-life insurance companies by up to 5 points, but it is unlikely to be significant to our supported syndicates.